Under New Management: How Leading Organizations Are Upending Business as Usual

by David Burkus

Overview

“Makes a provocative case that you should put customers second, close open offices, and ditch performance appraisals.”—Adam Grant, best-selling author of Originals

“Under New Management is a lively, provocative must-read.”—Whitney Johnson, author of Disrupt Yourself.
 
Why accepted management practices don’t work—and how innovative companies are changing the rules
 
Should your employees know each other’s salaries? Is your vacation policy harming productivity? Does your hiring process undermine your team? David Burkus argues that the traditional management playbook is full of outdated, counterproductive practices, and he reveals how the alternative management revolution has already started at companies like Netflix, Zappos, Google, and others. Burkus investigates behind their office doors to show how these companies are reevaluating and reinventing the most basic management principles, like hiring, firing, vacation policy, and even office floor plan, and enhancing their business’s success as a result.
 
“Is your company ready for a radical departure from twentieth-century management standards? David Burkus has collected the stories of dozens of companies that are standing the old rules on their heads. Even better, Burkus shows how you can do it, too.”—Daniel H. Pink, best-selling author of Drive and To Sell Is Human

“If you are going to read one book on being a better manager in the next year, start here. David Burkus has assembled the most practical research and provocative ideas into an incredibly quick read.”—Tom Rath, best-selling author of StrengthsFinder 2.0

Product Details

ISBN-13:	9781328781642
Publisher:	HarperCollins
Publication date:	06/13/2017
Pages:	256
Sales rank:	974,381
Product dimensions:	5.20(w) x 7.70(h) x 0.80(d)

About the Author

David Burkus is associate professor of leadership and innovation at Oral Roberts University where he was recently named one of the nation’s Top 40 Under 40 Professors Who Inspire. He’s the author of four books and has delivered keynote speeches and workshops for Fortune 500 companies including Microsoft and Google. Since 2017, he’s been ranked as one of the world’s top business thought leaders by Thinkers50. He lives outside of Tulsa with his wife and their two boys.

Read an Excerpt

Introduction
Management Needs New Management 
In 1898 the Bethlehem Iron Company was in trouble. The company was facing increased competition and losing ground quickly. Besides its misnomer company name (they actually produced steel), its share of the market as a supplier to the railroad industry was rapidly being grabbed by a growing number of Pittsburgh-based firms, including the Carnegie Steel Company.

To try to turn their fortunes around, Bethlehem Iron’s leaders hired a middle-aged intellectual with an interesting past. He had studied at the renowned preparatory school Phillips Exeter Academy, with the intention of continuing his education at Harvard. But after passing the Harvard entrance exam with honors, he decided against attending. Instead, in a somewhat stunning move, he became a machinist and worked his way up the factory floor to become foreman. He studied mechanical engineering by night while he continued to work as both a laborer and a foreman by day. By 1898, having begun to merge his intellectual knowledge with his laborer’s experience, he decided to become a consultant.

His name was Frederick Winslow Taylor.

Taylor brought to Bethlehem Iron a new set of tools for maximizing the efficiency of the steelworks. His method was to systematically study every task in the system of production, then eliminate unnecessary tasks and train laborers in the detailed and specific way to execute each task. After perfecting the system and the tasks, Taylor sought to perfect the laborers themselves by removing hourly wages and assigning a specific pay rate to the segment of work for which they were personally responsible.

This “piece-rate” system was seen as a way to increase the speed of production and decrease loafing among workers. Taylor himself would repeat that there was not a single manual laborer “who does not devote a considerable part of his time to studying just how slowly he can work and still convince his employer that he is going at a good pace.” It was Taylor’s role as a consultant to study what that good pace actually was.

Taylor would also study the tools of production. In one instance, he famously asserted that the most effective load a worker should carry in a shovel was 21.5 pounds, but that workers often used the same shovel regardless of the material being loaded (and hence the weight often varied in the load they were actually carrying). Taylor found or designed new shovels for each material that would scoop exactly 21.5 pounds. Taylor viewed the discovery of such specific levels of efficiency as out of the intellectual reach of the common laborer; the ideal worker, in his mind, was simply an unskilled cog in the larger machine, trained to do just one task and rewarded when he performed that task optimally. Taylor asserted that “it is only through enforced standardization of methods, enforced adoption of the best implements and working conditions, and enforced cooperation that this faster work can be assured. And the duty of enforcing the adoption of standards and enforcing this cooperation rests with the management alone.” In short, Taylor didn’t need the minds of laborers; he only needed their bodies.

Not surprisingly, his ideas weren’t easily accepted by the laborers themselves. Taylor’s rigid methods had indeed increased production, but those changes also caused strife among laborers and managers who were used to the way they had been working. By 1901 Taylor was forced to leave Bethlehem Iron after disputes with other managers. But he didn’t walk away from his principles of “scientific management.” Instead, he began spreading his ideas as far as he could, and he would eventually see them readily adopted.

Taylor’s concept of scientific management came at exactly the right time. Just before the turn of the nineteenth century, there had rarely been a need for smart managers to supervise large groups of unskilled laborers. In 1790, 90 percent of the working population in the United States lived on farms, producing food for themselves but also items like clothing, furniture, soap, and candles. What little commercial manufacturing existed was done by skilled artisans who worked in small shops that often doubled as their homes.

The industrial revolution changed all of that. As new machines were invented and ways to power those machines were discovered, the speed of production for various tasks quickened. Between 1890, just before Taylor began working with Bethlehem Iron, and 1958, manufacturing output per labor-hour in the United States grew almost fivefold (and it has kept growing rapidly ever since). Products that used to be created by lone artisans were now mass-produced in large factories. Those factories needed employees. Those employees needed managers. Those managers needed tools.

Frederick Winslow Taylor provided the tools to manage the people in those factories. His ideas dramatically increased the speed and efficiency of production and helped companies grow. There are even those who say that the amazing economic growth of the twentieth century stems largely from Taylor’s management ideas and the ideas they inspired. As the majority of the population moved from farm work to factory work, the style of management that fueled that growth became the unquestioned standard — the universal toolbox. Over time, others would build on Taylor’s work and add more tools that built off his ideas (or sometimes were positioned as replacements for Taylor’s ideas), thus becoming part of the toolbox used to manage large-scale industrial firms. Even the most drastic departures from Taylor’s ideas were still tools to be used by the managers and leaders of large-scale, largely industrial firms.

Taylor’s public lectures were eventually published as books. The most popular, Principles of Scientific Management, was published in 1911, and sales quickly took off around the country and the world, even as far as Japan. (When Taylor’s grandson visited Japan, he reported that managers of many companies insisted on taking their picture with him.) Taylor inspired a group of efficiency-minded managers who started a monthly magazine called System, which featured articles on maximizing the efficiency of all aspects of work. System would grow in popularity and eventually take the new title of Businessweek.

Universities started business schools to train managers and future managers on how to use the tools of scientific management to maximize production and minimize costs. Taylor even joined one, becoming a professor at the Tuck School of Business at prestigious Dartmouth College. Companies began to “benchmark” their practices by comparing their use of these tools to how the industry leaders were using them. Amazingly, many of these basic management tools are still taught at business schools and benchmarked by managers. After all, these tools got us to where we are today.

But the truth is, where we are today looks a whole lot different than where we were when Frederick Winslow Taylor first stepped onto the factory floor at Bethlehem Iron in the 1800s.

Throughout the latter part of the twentieth century, the nature of work changed dramatically for a lot of people. Instead of manual labor (performing routine tasks in the service of mass-producing a product), organizations increasingly needed their workforce to engage in mental labor — making decisions about redesigning products or about marketing them, or designing information technology systems, or finding new sources of capital. The volume of mental labor — or “knowledge work,” as it would become known — has continued to grow. But for a very long time now, management has held on to the tools of the past — like a factory worker using the same shovel regardless of the material being shoveled.

Table of Contents

Introduction: Management Needs New Management 1

1 Outlaw Email 13

2 Put Customers Second 26

3 Lose the Standard Vacation Policy 44

4 Pay People to Quit 58

5 Make Salaries Transparent 71

6 Ban Noncompetes 86

7 Ditch Performance Appraisals 102

8 Hire as a Team 117

9 Write the Org Chart in Pencil 132

10 Close Open Offices 148

11 Take Sabbaticals 162

12 Fire the Managers 176

13 Celebrate Departures 192

Afterword: Reinventing the Management Engine 206

Next Steps 211

Acknowledgments 212

Notes 213

Index 234

About the Author 245

Editorial Reviews

"Is your company ready for a radical departure from 20th-century management standards and a bold move into a new approach? In UNDER NEW MANAGEMENT, David Burkus has collected the stories of dozens of companies that are making this journey.  They’re standing the old rules on their heads and running their businesses with refreshing amounts of transparency and autonomy. Even better, Burkus shows how you can do it, too.” - Daniel H. Pink, bestselling author of DRIVE and TO SELL IS HUMAN "I can't stop raving about Under New Management to friends and colleagues. If you are going to read one book on being a better manager in the next year, start here. David Burkus has assembled the most practical research and provocative ideas into an incredibly quick read.”  - Tom Rath, bestselling author of STRENGTHS FINDER 2.0 "In Under New Management, Burkus hauls 20th-century management ideas to the scrap heap while revealing counterintuitive practices that will drive organizational performance in the back half of the 21st century. And like any good manager, he under-promises, and over-delivers. Under New Management is a lively, provocative, must read."  –Whitney Johnson, Thinkers50, World's Most Influential Management Thinkers, author of DISRUPT YOURSELF: PUTTING THE POWER OF DISRUPTIVE INNOVATION TO WORK. “David Burkus challenges established management principles and reveals the counterintuitive practices that really drive organizational performance. Under New Management makes a provocative case that you should put customers second, close open offices, and ditch performance appraisals.” -Adam Grant, Wharton professor and New York Times bestselling author of GIVE AND TAKE and ORIGINALS Under New Management dares us to rethink some of our most closely held assumptions about management – should we fire managers? Pay people to quit?  Celebrate departures?  Burkus masterfully questions so-called "best practices” and illustrates how today’s leading companies are unleashing human talent.  If you want to stay ahead in the new game of work, read this book! -Liz Wiseman, bestselling author of MULTIPLIERS and ROOKIE SMARTS   On Seinfeld, perpetual screw-up George Constanza eventually realized that since every impulse he had turned out to be wrong, if he simply did the opposite he would succeed. In David Burkus' brilliant follow-up to the Myths of Creativity, he proves (with data!) just how well that same bit of logic applies to modern management.  Get rid of your email, open offices, and performance reviews.  Let people take vacation whenever they want, and pay them to quit.  If what you’re doing isn’t working, Burkus will show you what does. -Heidi Grant Halvorson, bestselling author of NO ONE UNDERSTANDS YOU AND WHAT TO DO ABOUT IT —

From the Publisher

03/28/2016
In this thought-provoking business book, Burkus, an associate professor of management at Oral Roberts University, asserts that many historical management practices are no longer relevant in today's workplace. In easily readable chapters, he challenges conventional thinking and offers "redesigned management tools," writing that they may "seem odd compared to business as usual, but the truth is that business isn't usual anymore." Burkus outlines the techniques some companies have introduced to lower stress and increase productivity, such as eliminating internal email, prioritizing employees over customers, allowing unlimited vacation time and employee-designed workspaces, and even doing away with bosses. He adds credibility to his suggestions with examples of leading companies such as Netflix, Starbucks, and Wegmans that have embraced management innovation. Berkus admits that the practices and policies profiled here won't work for everyone, but he intends the book's case studies to provide "validation for leaders everywhere to start experimenting." Managers looking for ways to engage their workforces and improve productivity will find Burkus's work a helpful guide. (Mar.)

Publishers Weekly

02/15/2016
Burkus (management, Oral Roberts Univ.) confirms that open-floor plans, annual performance reviews, and internal email might be doing more harm than good. This exploration of disruptive practices in personnel management considers 13 different approaches companies can take to change the way they interact with employees. Using examples from both established Fortune 500 companies and start-ups to show how innovative practices are improving satisfaction in the workplace, Burkus also explains why it makes sense from a management perspective that companies such as Zappos, Amazon, and Riot Games offer new employees monetary incentive to quit within the first month. He further outlines the rationales behind strategies such as making salaries public, offering unlimited vacation and parental leave, providing sabbaticals, rethinking organizational charts, and banning noncompete clauses. While the book ignores any potential downside to these methods, it provides a compelling argument on why employees—not customers or stockholders—should come first. VERDICT This recommended title will appeal to business readers seeking examples of companies that are harnessing the power of autonomy and transparency.—John Rodzvilla, Emerson Coll., Boston

Library Journal